All posts by Daniel Lacalle

About Daniel Lacalle

Daniel Lacalle (Madrid, 1967). PhD Economist and Fund Manager. Author of bestsellers "Life In The Financial Markets" and "The Energy World Is Flat" as well as "Escape From the Central Bank Trap". Daniel Lacalle (Madrid, 1967). PhD Economist and Fund Manager. Frequent collaborator with CNBC, Bloomberg, CNN, Hedgeye, Epoch Times, Mises Institute, BBN Times, Wall Street Journal, El Español, A3 Media and 13TV. Holds the CIIA (Certified International Investment Analyst) and masters in Economic Investigation and IESE.

Economic Pain? Market Concerns About the US Economy May Be Exaggerated

A correction in equity markets tends to generate an immediate negative reaction from citizens, citing political headlines about tariffs and trade as the reasons for equity volatility. However, if markets were scared about the US economy, German and Japanese sovereign bonds would not have declined. Furthermore, at the close of this article, 493 stocks in the S&P 500 are flat in the first quarter despite having reached all-time highs in 2024 and all the negative headlines of 2025.

The Bloomberg US Large Cap Index, excluding the magnificent seven, is flat year-to-date. It seems that we are living a normal correction after a massive bull run in the past five years, coming from expectations of persistent inflation and fewer rate cuts. That is why German and Japanese sovereign bonds, historically the beneficiaries in a risk-off scenario, are weak.

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Devaluing the US dollar: How to Make America Poorer Again.

In recent days, we have read numerous articles about a possible agreement between the US administration and its main trading partners to devalue the US dollar. It has been named “The Mar-A-Lago Accord”, a concept inspired by the Plaza Accord of 1985, which aimed to devalue the US dollar to address trade imbalances. That plan failed.

The objective, according to the financial media, would be to weaken the US dollar, boost US export competitiveness, and rebalance global trade. Another proposal involves restructuring US debt by swapping existing obligations for longer-term bonds, such as 100-year Treasury bonds, to ease fiscal pressures. However, this would be a dangerous and potentially counterproductive idea.

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Markets Need More than Rate Cuts to Recover

The consensus narrative tells you that markets are weak because of Trump’s tariffs. However, that is a typical excuse that makes no sense. If tariffs were the cause of concern, markets would have tanked in 2016 and in 2021. Remember that Biden maintained and increased all of Trump’s tariffs. Between 2016 and 2024, the tariffs imposed by the European Union and China on the United States were much larger than levies against them. However, you never read or heard that the EU and China tariffs were going to destroy the economy or lead to massive inflation.

The mainstream consensus narrative always wants you to believe that tariffs are fine if imposed by socialist countries and evil if imposed by the United States. However, if the market was alarmed by tariffs and the disastrous impact they may have on the economy, German and Japanese bond yields would not have soared. Instead, they would have plummeted as investors sought refuge. Furthermore, if the world feared a US economic disaster, Treasury bond yields would not have declined.

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Uncharted Waters: How President Trump can Navigate Toward a More Resilient Economy

By Daniel Lacalle and Jaime Figueras

This week, financial markets have experienced unprecedented volatility.

Uncharted Waters: How President Trump can Navigate Toward a More Resilient Economy
Jaime Figueras

Two key issues dominate the national conversation: first, the shifting economic landscape under President Trump’s leadership and second, the increasing financial burden faced by older Americans. While market uncertainty looms, President Trump’s policies are aimed at fostering long-term stability and growth, both domestically and globally.

At the same time, we urgently need to address the mounting credit card debt among older Americans who are facing financial difficulties as they near retirement.

These two issues, while seemingly unrelated, share a common theme: the need for strategic planning, responsible policies, multi-horizon solutions that alleviate the immediate economic burden for older Americans as well as long-term solutions that galvanize the US economy for younger individuals.

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